MSCI Warns Indonesia May Be Reclassified to Frontier Market
MSCI has warned that without sufficient progress by November, it may pursue reclassification of Indonesia from emerging to frontier market status, a move that could spur further foreign capital outflows.
MSCI has issued a warning that if adequate progress is not demonstrated by November, the index provider may consider options that include launching a consultation on reclassifying Indonesia from an emerging market to a frontier market.
Such a reclassification would likely trigger additional foreign outflows, as many institutional mandates restrict frontier market exposure. The warning places pressure on Indonesian authorities to address the criteria underpinning its current emerging market status.
Source: First Squawk